In simpler terms...........Extreme Margin Debt! They borrowed against their own equity to buy more stock etc, which then can create bubble pricing when things are artistically robust -- its called a A bull market ! Then....when Shit hits the fan, a MASSIVE sell-off occurs when company earnings are released that don't meet the streets expectations, or some other unforeseen issues arise. If margin debt is sky high ....the sell-off becomes much greater.
You can use 9-11 or the U.S real estate market crash as a trigger to a massive stock market sell-off. If anyone can recall what happened.
Stock leveraging is great in a bull market, but when the turn heads south and becomes vicious .....watch out!! Bankers and brokerage firms want their dues, and they want it NOW!!! When no one has the cash......everyone SELLS, SELLS, SELLS.!!!
